Correlation Between Manhattan Bridge and Franklin BSP
Can any of the company-specific risk be diversified away by investing in both Manhattan Bridge and Franklin BSP at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Manhattan Bridge and Franklin BSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Bridge Capital and Franklin BSP Realty, you can compare the effects of market volatilities on Manhattan Bridge and Franklin BSP and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Manhattan Bridge with a short position of Franklin BSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan Bridge and Franklin BSP.
Diversification Opportunities for Manhattan Bridge and Franklin BSP
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Manhattan and Franklin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Bridge Capital and Franklin BSP Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin BSP Realty and Manhattan Bridge is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Manhattan Bridge Capital are associated (or correlated) with Franklin BSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin BSP Realty has no effect on the direction of Manhattan Bridge i.e., Manhattan Bridge and Franklin BSP go up and down completely randomly.
Pair Corralation between Manhattan Bridge and Franklin BSP
Given the investment horizon of 90 days Manhattan Bridge Capital is expected to under-perform the Franklin BSP. But the stock apears to be less risky and, when comparing its historical volatility, Manhattan Bridge Capital is 1.05 times less risky than Franklin BSP. The stock trades about -0.07 of its potential returns per unit of risk. The Franklin BSP Realty is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,294 in Franklin BSP Realty on August 24, 2024 and sell it today you would lose (8.00) from holding Franklin BSP Realty or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Manhattan Bridge Capital vs. Franklin BSP Realty
Performance |
| Timeline |
| Manhattan Bridge Capital |
| Franklin BSP Realty |
Manhattan Bridge and Franklin BSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manhattan Bridge and Franklin BSP
The main advantage of trading using opposite Manhattan Bridge and Franklin BSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Bridge position performs unexpectedly, Franklin BSP can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Franklin BSP will offset losses from the drop in Franklin BSP's long position.| Manhattan Bridge vs. Franklin BSP Realty | Manhattan Bridge vs. AGNC Investment Corp | Manhattan Bridge vs. Nexpoint Real Estate | Manhattan Bridge vs. Great Ajax Corp |
| Franklin BSP vs. AGNC Investment Corp | Franklin BSP vs. Nexpoint Real Estate | Franklin BSP vs. Great Ajax Corp | Franklin BSP vs. Ladder Capital Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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